To be profitable, a firm must recover its costs. These costs include both its fixed and its variable costs. One way that a firm evaluates at what stage it would recover the invested costs is to calculate how many units or how much in dollar sales is necessary for the firm to earn a profit.

Consider the case of Blue Mouse Manufacturers:

Blue Mouse Manufacturers is considering a project that will have fixed costs of $15,000,000. The product will be sold for $32.50 per unit, and will incur a variable cost of $10.75 per unit.

A) 30,769

B) 689,655

C) 314,199

D) 145,015

Given Blue Mouses cost structure, it will have to sell units to break even on this project (QBEQBE).